Indian stock markets turned decidedly lower after Finance Minister Arun Jaitley's Union Budget announcement. The BSE Sensex plunged 338 points at the day's low. From the day's high, the Sensex traded 600 points lower.
What's driving markets lower:
Cigarette maker ITC, which is the most influential stock in the Sensex, plunged over 9 per cent, taking markets lower with it.
ITC and other cigarette makers like Godfrey Phillips India and VST Industries fell sharply after Mr Jaitley proposed an excise duty hike of 15 per cent and 25 per cent for different categories of cigarettes. The hike in excise duty will make cigarettes costlier.
ITC was the top loser in Sensex and Nifty indices. In Sensex, the stock contributed nearly 30 points in the downside single handedly.
Another big reason may be the absence of foreign investors on a Saturday, analysts added. Mr Jaitley proposed the postponement of the dreaded General Anti-Avoidance Rules or GAAR by two years.
Under the GAAR regime, authorities can deny tax benefit to any arrangement that is entered into primarily to avoid tax. The rule would have taxed foreign investors that route portfolio investments through tax havens such as Mauritius.
The postponement of GAAR is a big boost for foreign investors; analysts say there could be increased investment in Indian stock markets in the coming days.
As of 3 p.m. Sensex was up 35 points at 29,255 and Nifty traded 29 points higher at Rs 8,874.
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